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Qatar's Barwa says Credit Crunch Hits $700 Million Loan - ASHARQ AL-AWSAT English Archive
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DUBAI (Reuters) – Qatar’s Barwa Real Estate Co BRES.QA confirmed on Monday it had reduced the size of an Islamic loan by $100 million to $700 million after it was undersubscribed due to the global credit crunch.

Barwa had planned to raise $800 million in a one-year revolving Islamic loan to finance expansion and current projects, it said in a statement on the Doha bourse Web site.

“Lenders’ appetite for the deal was hit because of the increased cost of funding prompted by the credit crunch,” Barwa said.

Banking sources told Reuters last week support for the deal was hit partly because as a non-sovereign, regional property company, the borrower has a limited number of relationship banks to call upon.

Islam bans lending on interest and in a murabaha deal a lender buys a commodity and sells it to the consumer at a higher price, locking in profit.

Government-owned Qatari Diar Real Estate & Investment Co owns 45 percent of Barwa.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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